One decision Texas couples who are getting a divorce may have to make is who will get the family home. Once the decision is made, there is still more work ahead if one spouse is going to be removed from the joint mortgage. While it also possible for both parties to remain on the mortgage, this puts the non-occupant at risk of a serious dent in credit scores if a mortgage payment is missed.
Both refinancing and a mortgage assumption mean the other spouse no longer has any responsibility for the loan. Before making any decisions, people should check first to make sure their mortgage allows an assumption. Both solutions have advantages and disadvantages, but there are some misconceptions about assumptions in particular. One is that an assumption can be done with just a few signatures and phone calls. While fees for a mortgage assumption can be considerably less than those for a refinance, the person is still required to submit extensive documentation of income, assets and other financial information. Furthermore, a mortgage assumption can take around three to six months compared to about 30 days for a refinance.
An attractive aspect of a mortgage assumption is that the person can keep the same favorable terms. However, if interest rates are low, a refinance could be made with similarly favorable terms.
The financial decisions that need to be made during a divorce, including negotiations over property division, may seem overwhelming. It may help for people to sit down with an attorney and discuss their post-divorce priorities. This might make it clear that it is better to simply sell the house or to avoid a court battle over some other asset. Many couples find that they reach a more satisfactory resolution through negotiation than litigation although for some, going to court may be necessary.